Fear of selling pressure on Mt.Gox eased, is BTC’s room for decline limited?

The crypto market rebounded across the board as traders’ selling sentiment eased on Tuesday. After bottoming at $58,433 on Monday night, Bitcoin rebounded above $61,000 in early trading on Tuesday, and rebounded above the support level of $62,000 during the midday session. As of press time, BTC was trading at $62,086, 24-hour increase 3.4%.

Altcoins benefited from Bitcoin’s recovery, with all but 8 of the top 200 tokens by market capitalization rising. The biggest gainer was Brett (BRETT), up 26%, trading at $0.1672, followed by dogwifhat (WIF), up 23.8%, and Dog (DOG), up 22.1%. The biggest decliners were LidoDAO (LIDO), down 1.9%, Tellor (TRB), down 1.8%, and CurveDAOToken (CRV), down 1.2%. The current overall market value of cryptocurrency is US$2.29 trillion, and Bitcoin’s market share is 53.5%.

The Root of Recent Weakness

While many believe potential selling pressure on Mt. Gox is responsible for the market correction, some analysts have pointed out that Mt. Instead, several analysts said the cryptocurrency market was simply experiencing typical post-halving shocks, layered with the usual “summer slump.”

ETCGroup analysts analyzed the recent weakness in cryptocurrencies. They pointed out that multiple factors have affected market sentiment, including reduced funds flowing into mainstream currencies, increased selling pressure from Bitcoin whales and miners, coupled with macro Increased risk.

Bitcoin data shows that Bitcoin has fallen by more than 20% from its historical high in March, and other altcoins have suffered an even heavier blow. The market value of global altcoins, except Ethereum, has dropped by an average of 32.6% from the recent high.

Overall, inflows into crypto assets have slowed significantly compared to levels seen following the launch of spot Bitcoin ETFs in the United States. Slowing inflows into Bitcoin and crypto ETFs have weighed on the market, with multiple analysts citing positive inflows as the main source of price gains in the first quarter of 2024.

ETCGroup analysts said: “On-chain inflows for major crypto assets such as Bitcoin and Ethereum have fallen from approximately $100 billion per month in March to just $20 billion per month since April, which is in line with the current situation. The pause in the bull market coincides with this and is one of the reasons why the market has failed to climb to new all-time highs again.”

Data released by CryptoQuant shows that 103,000 Bitcoins have been added to over-the-counter (OTC) transactions in the past six weeks. In over-the-counter wallets, increasing OTC wallet balances and falling prices indicate that these sell orders have not yet found buyers.

YieldApp chief investment officer Lucas Kiely said in a report: “BTC and the broader cryptocurrency market are currently proving that the old adage ‘sell in May, stay out in the summer’ still holds true as prices remain Downturn. In addition, macro factors have been, and may still be, the biggest driver of Bitcoin price action"

Kiely said, "U.S. inflation is slowing but remains well above the Fed's 2% target, which means. , even though this is an election year, the Fed may, in line with its mandate, delay cutting interest rates until inflation is completely under control – and both traditional and digital asset markets are showing that.”

As for the impending approval of the ETH ETF, Kiely said: "The market enthusiasm is not high. Ethereum does not receive as much demand and attention as Bitcoin. The approval of ETF or ETH investment funds will not only not push up the price of ETH, but may instead increase downward pressure." ”

Analysts warn: “Continued downward revisions to global economic growth expectations, coupled with rising risks of a U.S. recession, may continue to pose challenges to Bitcoin and other crypto assets in the near term. It is also worth noting that global growth. Changes in expectations have been the most dominant macroeconomic driver in recent months, accounting for more than 80% of Bitcoin's performance fluctuations in the past 6 months. "

" Others are greedy and I am fearful, and others are fearful and I am greedy." But ETC Group. Analysts say the recent price drop may have alarmed traders who were less confident about the long-term prospects of Bitcoin and the cryptocurrency market, and that prices may have bottomed out. They note: "Wall Street wisdom holds that the average individual investor is most bullish at market tops and most bearish at market bottoms. In theory, overly bullish sentiment heralds a market top, while overly bearish sentiment heralds a market bottom. In fact "We believe that multiple indicators have indicated that positioning is unbalanced, market sentiment is bearish, and 'weakhands' have mostly exited the market." Across all these indicators, we believe the short-term risk/reward is becoming increasingly asymmetric, with further downside risks relatively limited. As a result, we believe the current market collapse represents increased interest in Bitcoin and Bitcoin ahead of major events in the coming months.

Great opportunity for investing in crypto assets

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